HF 4366

as introduced - 92nd Legislature (2021 - 2022) Posted on 03/17/2022 02:21pm

A bill for an act
relating to agriculture; establishing cooperative grants for farmers; establishing
the grain indemnity fund; making policy and technical changes to agricultural
provisions; providing criminal penalties; appropriating money; amending Minnesota
Statutes 2020, sections 17.041, subdivision 1; 17.117, subdivisions 9, 9a, 10, 11,
11a; 17.118, subdivisions 1, 3, 4; 41B.047, subdivision 3; 223.17, subdivisions 7,
7a; 223.175; 223.19; 232.22, subdivision 5; Minnesota Statutes 2021 Supplement,
section 41A.21, subdivisions 2, 6; Laws 2021, First Special Session chapter 3,
article 1, section 2; proposing coding for new law in Minnesota Statutes, chapters
17; 103F; 223; repealing Minnesota Statutes 2020, sections 223.17, subdivisions
4, 8; 232.22, subdivisions 4, 6, 6a, 7.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

ARTICLE 1

AGRICULTURE APPROPRIATIONS

Section 1.

Laws 2021, First Special Session chapter 3, article 1, section 2, is amended to
read:

Sec. 2. DEPARTMENT OF AGRICULTURE

Subdivision 1. Total Appropriation

$

59,303,000

$

deleted text begin 59,410,000 deleted text end new text begin 98,460,000 new text end

Appropriations by Fund
	2022	2023
General	58,904,000	deleted text begin 59,011,000 deleted text end new text begin 98,061,000 new text end
Remediation	399,000	399,000

The amounts that may be spent for each
purpose are specified in the following
subdivisions.

Subd. 2. Protection Services

Appropriations by Fund
	2022	2023
General	19,384,000	deleted text begin 19,610,000 deleted text end new text begin 38,710,000 new text end
Remediation	399,000	399,000

(a) $399,000 the first year and $399,000 the
second year are from the remediation fund for
administrative funding for the voluntary
cleanup program.

(b) $175,000 the first year and $175,000 the
second year are for compensation for
destroyed or crippled livestock under
Minnesota Statutes, section 3.737. The first
year appropriation may be spent to compensate
for livestock that were destroyed or crippled
during fiscal year 2021. If the amount in the
first year is insufficient, the amount in the
second year is available in the first year. The
commissioner may use up to $5,000 each year
to reimburse expenses incurred by university
extension educators to provide fair market
values of destroyed or crippled livestock. If
the commissioner receives federal dollars to
pay claims for destroyed or crippled livestock,
an equivalent amount of this appropriation
may be used to reimburse nonlethal prevention
methods performed by federal wildlife services
staff.

(c) $155,000 the first year and $155,000 the
second year are for compensation for crop
damage under Minnesota Statutes, section
3.7371. If the amount in the first year is
insufficient, the amount in the second year is
available in the first year. The commissioner
may use up to $10,000 of the appropriation
each year to reimburse expenses incurred by
the commissioner or the commissioner's
approved agent to investigate and resolve
claims, as well as for costs associated with
training for approved agents. The
commissioner may use up to $20,000 of the
appropriation each year to make grants to
producers for measures to protect stored crops
from elk damage.

If the commissioner determines that claims
made under Minnesota Statutes, section 3.737
or 3.7371, are unusually high, amounts
appropriated for either program may be
transferred to the appropriation for the other
program.

(d) $225,000 the first year and $225,000 the
second year are for additional funding for the
noxious weed and invasive plant program.

new text begin (e) $1,000,000 the second year is for a transfer
to the noxious weed and invasive plant species
assistance account established under
Minnesota Statutes, section 18.89, for grants
to local units of government and Tribal
Nations for noxious weed detection, control,
and management. This is a onetime
appropriation.
new text end

deleted text begin (e) deleted text end new text begin (f) new text end $50,000 the first year is for additional
funding for the industrial hemp program for
IT development. This is a onetime
appropriation and is available until June 30,
2023.

deleted text begin (f) deleted text end new text begin (g) new text end $110,000 the first year and $110,000
the second year are for additional meat and
poultry inspection services. The commissioner
is encouraged to seek inspection waivers,
matching federal dollars, and offer more online
inspections for the purposes under this
paragraph.

deleted text begin (g) deleted text end new text begin (h) new text end $825,000 the first year and $825,000
the second year are to replace capital
equipment in the Department of Agriculture's
analytical laboratory.

deleted text begin (h) deleted text end new text begin (i) new text end $274,000 the first year and $550,000
the second year are to maintain the current
level of service delivery.

new text begin (j) $5,000,000 the second year is for a transfer
to the grain indemnity fund established under
Minnesota Statutes, section 223.24. This is a
onetime appropriation.
new text end

new text begin (k) $100,000 the second year is to support
laboratory testing for the Minnesota meat and
poultry inspection program. The base for this
appropriation is $50,000 in fiscal year 2024
and thereafter.
new text end

new text begin (l) $3,000,000 the second year is for grants to
fund the Forever Green Agriculture Initiative
at the University of Minnesota. The purpose
of funding is to drive development of
decentralized and regionalized supply chains
for continuous living crops including a range
of pilot supply chain projects which may
include risk management, postproduction,
processing, distribution, and marketing for
continuous living crops. This is a onetime
appropriation. Notwithstanding Minnesota
Statutes, section 16A.28, appropriations
encumbered under contract on or before June
30, 2023, are available until June 30, 2026.
new text end

new text begin (m) $10,000,000 the second year is
appropriated from the general fund to the
commissioner of agriculture for the soil health
financial assistance program. This amount is
available until expended. The base
appropriation under this section in fiscal year
2024 and thereafter is $1,000,000.
new text end

Subd. 3. Agricultural Marketing and Development

4,200,000

deleted text begin 4,205,000 deleted text end new text begin 5,855,000 new text end

(a) $186,000 the first year and $186,000 the
second year are for transfer to the Minnesota
grown account and may be used as grants for
Minnesota grown promotion under Minnesota
Statutes, section 17.102. Grants may be made
for one year. Notwithstanding Minnesota
Statutes, section 16A.28, the appropriations
encumbered under contract on or before June
30, 2023, for Minnesota grown grants in this
paragraph are available until June 30, 2025.

(b) $50,000 the first year is to expand
international marketing opportunities for
farmers and value-added processors, including
in-market representation in Taiwan. This is a
onetime appropriation and is available until
June 30, 2023.

(c) $634,000 the first year and $634,000 the
second year are for continuation of the dairy
development and profitability enhancement
programs including dairy profitability teams
and dairy business planning grants under
Minnesota Statutes, section 32D.30.

(d) $50,000 the first year and $50,000 the
second year are for additional funding for
mental health outreach and support to farmers
and others in the agricultural community,
including a 24-hour hotline, stigma reduction,
and educational offerings. These are onetime
appropriations.

(e) The commissioner may use funds
appropriated in this subdivision for annual
cost-share payments to resident farmers or
entities that sell, process, or package
agricultural products in this state for the costs
of organic certification. The commissioner
may allocate these funds for assistance to
persons transitioning from conventional to
organic agriculture.

(f) $100,000 the first year and $100,000 the
second year are for the farm safety grant and
outreach programs under Minnesota Statutes,
section 17.1195. new text begin Notwithstanding Minnesota
Statutes, section 16A.28, any unencumbered
balance does not cancel at the end of the first
year and is available in the second year. new text end These
are onetime appropriations.

(g) $54,000 the first year and $109,000 the
second year are to maintain the current level
of service delivery.

new text begin (h) $1,500,000 the second year is available to
create and implement a program to support
farmers markets and direct marketing
producers. Of this amount, $1,000,000 is for
a grant to the Minnesota Farmers' Market
Association for awards to farmers' markets
not exceeding $5,000 per market location for
equipment and infrastructure. The Minnesota
Farmers' Market Association may use up to
6.5 percent of the grant awarded under this
paragraph for administrative expenses. This
is a onetime appropriation and is available
until June 30, 2024.
new text end

new text begin (i) $150,000 the second year is to create and
implement a program, including grants and
other forms of financial assistance for
specialty crop growers and value-added
businesses transitioning to sustainable
packaging solutions. The commissioner may
give preference to producers that must comply
with Food Safety Modernization Act
requirements. This is a onetime appropriation
and is available until June 30, 2024.
new text end

Subd. 4. Agriculture, Bioenergy, and Bioproduct Advancement

25,343,000

deleted text begin 25,357,000 deleted text end new text begin 32,157,000 new text end

(a) $9,300,000 the first year and $9,300,000
the second year are for transfer to the
agriculture research, education, extension, and
technology transfer account under Minnesota
Statutes, section 41A.14, subdivision 3. Of
these amounts: at least $600,000 the first year
and $600,000 the second year are for the
Minnesota Agricultural Experiment Station's
agriculture rapid response fund under
Minnesota Statutes, section 41A.14,
subdivision 1, clause (2); $2,000,000 the first
year and $2,000,000 the second year are for
grants to the Minnesota Agriculture Education
Leadership Council to enhance agricultural
education with priority given to Farm Business
Management challenge grants; $350,000 the
first year and $350,000 the second year are
for potato breeding; and $450,000 the first
year and $450,000 the second year are for the
cultivated wild rice breeding project at the
North Central Research and Outreach Center
to include a tenure track/research associate
plant breeder. The commissioner shall transfer
the remaining funds in this appropriation each
year to the Board of Regents of the University
of Minnesota for purposes of Minnesota
Statutes, section 41A.14. Of the amount
transferred to the Board of Regents, up to
$1,000,000 each year is for research on avian
influenza, salmonella, and other turkey-related
diseases. By January 15, 2023, entities
receiving grants for potato breeding and wild
rice breeding are requested to report to the
chairs and ranking minority members of the
legislative committees with jurisdiction over
agriculture and higher education regarding the
use of the grant money and to provide an
update on the status of research and related
accomplishments.

To the extent practicable, money expended
under Minnesota Statutes, section 41A.14,
subdivision 1, clauses (1) and (2), must
supplement and not supplant existing sources
and levels of funding. The commissioner may
use up to one percent of this appropriation for
costs incurred to administer the program.

(b) $16,028,000 the first year and deleted text begin $16,028,000 deleted text end new text begin
$22,828,000 new text end the second year are for the
agricultural growth, research, and innovation
program under Minnesota Statutes, section
41A.12. Except as provided below, the
commissioner may allocate the appropriation
each year among the following areas:
facilitating the start-up, modernization,
improvement, or expansion of livestock
operations including beginning and
transitioning livestock operations with
preference given to robotic dairy-milking
equipment; providing funding not to exceed
$800,000 each year to develop and enhance
farm-to-school markets for Minnesota farmers
by providing more fruits, vegetables, meat,
grain, and dairy for Minnesota children in
school and child care settings including, at the
commissioner's discretion, reimbursing
schools for purchases from local farmers;
assisting value-added agricultural businesses
to begin or expand, to access new markets, or
to diversify, including aquaponics systems;
providing funding not to exceed $600,000
each year for urban youth agricultural
education or urban agriculture community
development of which $10,000 each year is
for transfer to the emerging farmer account
under Minnesota Statutes, section 17.055,
subdivision 1a; providing funding not to
exceed $450,000 each year for the good food
access program under Minnesota Statutes,
section 17.1017; facilitating the start-up,
modernization, or expansion of other
beginning and transitioning farms including
by providing loans under Minnesota Statutes,
section 41B.056; sustainable agriculture
on-farm research and demonstration;
development or expansion of food hubs and
other alternative community-based food
distribution systems; enhancing renewable
energy infrastructure and use; crop research;
Farm Business Management tuition assistance;
and good agricultural practices and good
handling practices certification assistance. The
commissioner may use up to 6.5 percent of
this appropriation for costs incurred to
administer the program.

Of the amount appropriated for the agricultural
growth, research, and innovation program
under Minnesota Statutes, section 41A.12:

(1) $1,000,000 the first year and $1,000,000
the second year are for distribution in equal
amounts to each of the state's county fairs to
preserve and promote Minnesota agriculture;

(2) $4,500,000 the first year and $4,500,000
the second year are for incentive payments
under Minnesota Statutes, sections 41A.16,
41A.17, 41A.18, and 41A.20. Notwithstanding
Minnesota Statutes, section 16A.28, the first
year appropriation is available until June 30,
2023, and the second year appropriation is
available until June 30, 2024. If this
appropriation exceeds the total amount for
which all producers are eligible in a fiscal
year, the balance of the appropriation is
available for other purposes under this
paragraph;

(3) $3,000,000 the first year and $3,000,000
the second year are for grants that enable retail
petroleum dispensers, fuel storage tanks, and
other equipment to dispense biofuels to the
public in accordance with the biofuel
replacement goals established under
Minnesota Statutes, section 239.7911. A retail
petroleum dispenser selling petroleum for use
in spark ignition engines for vehicle model
years after 2000 is eligible for grant money
under this clause if the retail petroleum
dispenser has no more than 10 retail petroleum
dispensing sites and each site is located in
Minnesota. The grant money must be used to
replace or upgrade equipment that does not
have the ability to be certified for E25. A grant
award must not exceed 65 percent of the cost
of the appropriate technology. A grant award
must not exceed $200,000 per station. The
commissioner must cooperate with biofuel
stakeholders in the implementation of the grant
program. The commissioner, in cooperation
with any economic or community development
financial institution and any other entity with
which it contracts, must submit a report on the
biofuels infrastructure financial assistance
program by January 15 of each year to the
chairs and ranking minority members of the
legislative committees and divisions with
jurisdiction over agriculture policy and
finance. The annual report must include but
not be limited to a summary of the following
metrics: (i) the number and types of projects
financed; (ii) the amount of dollars leveraged
or matched per project; (iii) the geographic
distribution of financed projects; (iv) any
market expansion associated with upgraded
infrastructure; (v) the demographics of the
areas served; (vi) the costs of the program;
and (vii) the number of grants to
minority-owned or female-owned businesses;

(4) $750,000 the first year and deleted text begin $750,000 deleted text end new text begin
$3,750,000 new text end the second year are for grants to
facilitate the start-up, modernization, or
expansion of meat, poultry, egg, and milk
processing facilities. A grant award under this
clause must not exceed $200,000. Any
unencumbered balance at the end of the second
year does not cancel until June 30, 2024, and
may be used for other purposes under this
paragraph. The appropriations under this
clause are onetime; deleted text begin and
deleted text end

(5) $1,400,000 the first year and $1,400,000
the second year are for livestock investment
grants under Minnesota Statutes, section
17.118. Any unencumbered balance at the end
of the second year does not cancel until June
30, 2024, and may be used for other purposes
under this paragraph. The appropriations under
this clause are onetime deleted text begin . deleted text end new text begin ;
new text end

new text begin (6) $250,000 the second year is to expand the
new markets cost-share program, including
developing food safety plans, such as HACCP,
and assisting with businesses moving from
cottage food exemptions to food handling
licenses. Any unencumbered balance at the
end of the second year does not cancel and is
available until June 30, 2024. The base
appropriation under this paragraph in fiscal
year 2024 and thereafter is $125,000;
new text end

new text begin (7) $1,500,000 the second year is for grants
to federally recognized economic development
districts to assist small- to medium-sized meat
and poultry processors hiring new employees.
New employees at eligible meat and poultry
processing plants may receive up to $10,000
in the form of sign-on bonuses, relocation
assistance, retention incentives, child care
stipends, training reimbursement, and other
related expenses. To be eligible, meat and
poultry processors must be licensed by the
state of Minnesota and have fewer than 150
employees. No individual processor may
receive more than $50,000 under this
paragraph. The base appropriation under this
paragraph in fiscal year 2024 and thereafter
is $750,000;
new text end

new text begin (8) $1,000,000 the second year is for grants
that facilitate the start-up, modernization, or
expansion of grocery stores, corner stores,
farmers' markets, and related food retailers.
Eligible activities include purchasing
equipment or upgrading infrastructure to
respond to community needs, maintain or
create service in a community, or improve
energy efficiency. Any unencumbered balance
at the end of the second year does not cancel
until June 30, 2024, and may be used for other
purposes under this paragraph. The base
appropriation under this paragraph in fiscal
year 2024 and thereafter is $250,000;
new text end

new text begin (9) $250,000 the second year is to expand
co-packing and shared cold storage capacity
through grants to co-packers, commercial
kitchens, restaurants, community entities with
the capacity to provide commercial production
space, and cold storage facilities. The base
appropriation under this paragraph in fiscal
year 2024 and thereafter is $125,000;
new text end

new text begin (10) $300,000 the second year is for farm
business management tuition assistance with
priority to specialty crop farmers, urban
farmers, and farmers facing mediation, and
support for new urban and specialty crop
instructor positions, including translation and
outreach. Any unencumbered balance at the
end of the second year does not cancel and is
available until June 30, 2024. The base
appropriation under this paragraph in fiscal
year 2024 and thereafter is $100,000; and
new text end

new text begin (11) $500,000 the second year is for grants to
local governments, regional planning and
economic development organizations, and
Tribal governments for planning and plan
implementation activities for value-added food
and agricultural economic development.
Eligible activities include economic
development planning, reviewing and
modifying zoning ordinances, assessing and
addressing infrastructure and capital
improvement needs such as co-packing and
community kitchens, increasing access for
emerging farmers, and similar efforts focused
on helping communities take advantage of
local and regional food and agricultural
resources to revitalize their economies. Any
unencumbered balance at the end of the second
year does not cancel and is available until June
30, 2024. The base appropriation under this
paragraph in fiscal year 2024 and thereafter
is $250,000.
new text end

Notwithstanding Minnesota Statutes, section
16A.28, any unencumbered balance does not
cancel at the end of the first year and is
available for the second year, and
appropriations encumbered under contract on
or before June 30, 2023, for agricultural
growth, research, and innovation grants are
available until June 30, 2026.

The base amount for the agricultural growth,
research, and innovation program is
deleted text begin $16,053,000 deleted text end new text begin $17,653,000 new text end in fiscal year 2024
and deleted text begin $16,053,000 deleted text end new text begin $17,653,000 new text end in fiscal year
2025, and includes funding for incentive
payments under Minnesota Statutes, sections
41A.16, 41A.17, 41A.18, and 41A.20.

(c) $15,000 the first year and $29,000 the
second year are to maintain the current level
of service delivery.

Subd. 5. Administration and Financial Assistance

9,977,000

deleted text begin 9,839,000 deleted text end new text begin 21,339,000 new text end

(a) $474,000 the first year and $474,000 the
second year are for payments to county and
district agricultural societies and associations
under Minnesota Statutes, section 38.02,
subdivision 1. Aid payments to county and
district agricultural societies and associations
shall be disbursed no later than July 15 of each
year. These payments are the amount of aid
from the state for an annual fair held in the
previous calendar year.

(b) $387,000 the first year and $337,000 the
second year are for farm advocate services.
Of these amounts, $100,000 the first year and
$50,000 the second year are for a pilot
program creating farmland access teams to
provide technical assistance to potential
beginning farmers. The farmland access teams
must assist existing farmers and beginning
farmers on transitioning farm ownership and
operation. Services provided by teams may
include but are not limited to providing
mediation assistance, designing contracts,
financial planning, tax preparation, estate
planning, and housing assistance. Of this
amount for farm transitions, up to $50,000 the
first year may be used to upgrade the
Minnesota FarmLink web application that
connects farmers looking for land with farmers
looking to transition their land.

(c) $47,000 the first year and $47,000 the
second year are for grants to the Northern
Crops Institute that may be used to purchase
equipment. These are onetime appropriations.

(d) $238,000 the first year and $238,000 the
second year are for transfer to the Board of
Trustees of the Minnesota State Colleges and
Universities for statewide mental health
counseling support to farm families and
business operators through the Minnesota State
Agricultural Centers of Excellence. South
Central College and Central Lakes College
shall serve as the fiscal agents.

(e) $1,700,000 the first year and $1,700,000
the second year are for grants to Second
Harvest Heartland on behalf of Minnesota's
six Feeding America food banks for the
following:

(1) to purchase milk for distribution to
Minnesota's food shelves and other charitable
organizations that are eligible to receive food
from the food banks. Milk purchased under
the grants must be acquired from Minnesota
milk processors and based on low-cost bids.
The milk must be allocated to each Feeding
America food bank serving Minnesota
according to the formula used in the
distribution of United States Department of
Agriculture commodities under The
Emergency Food Assistance Program. Second
Harvest Heartland may enter into contracts or
agreements with food banks for shared funding
or reimbursement of the direct purchase of
milk. Each food bank that receives funding
under this clause may use up to two percent
for administrative expenses;

(2) to compensate agricultural producers and
processors for costs incurred to harvest and
package for transfer surplus fruits, vegetables,
and other agricultural commodities that would
otherwise go unharvested, be discarded, or
sold in a secondary market. Surplus
commodities must be distributed statewide to
food shelves and other charitable organizations
that are eligible to receive food from the food
banks. Surplus food acquired under this clause
must be from Minnesota producers and
processors. Second Harvest Heartland may
use up to 15 percent of each grant awarded
under this clause for administrative and
transportation expenses; and

(3) to purchase and distribute protein products,
including but not limited to pork, poultry, beef,
dry legumes, cheese, and eggs to Minnesota's
food shelves and other charitable organizations
that are eligible to receive food from the food
banks. Second Harvest Heartland may use up
to two percent of each grant awarded under
this clause for administrative expenses. Protein
products purchased under the grants must be
acquired from Minnesota processors and
producers.

Of the amount appropriated under this
paragraph, at least $600,000 each year must
be allocated under clause (1). Notwithstanding
Minnesota Statutes, section 16A.28, any
unencumbered balance the first year does not
cancel and is available in the second year.
Second Harvest Heartland must submit
quarterly reports to the commissioner and the
chairs and ranking minority members of the
legislative committees with jurisdiction over
agriculture finance in the form prescribed by
the commissioner. The reports must include
but are not limited to information on the
expenditure of funds, the amount of milk or
other commodities purchased, and the
organizations to which this food was
distributed.

(f) $250,000 the first year and $250,000 the
second year are for grants to the Minnesota
Agricultural Education and Leadership
Council for programs of the council under
Minnesota Statutes, chapter 41D.

(g) $1,437,000 the first year and $1,437,000
the second year are for transfer to the
agricultural and environmental revolving loan
account established under Minnesota Statutes,
section 17.117, subdivision 5a, for low-interest
loans under Minnesota Statutes, section
17.117. The base for appropriations under this
paragraph in fiscal year 2024 and thereafter
is $1,425,000. The commissioner must
examine how the department could use up to
one-third of the amount transferred to the
agricultural and environmental revolving loan
account under this paragraph to award grants
to rural landowners to replace septic systems
that inadequately protect groundwater. No
later than February 1, 2022, the commissioner
must report to the legislative committees with
jurisdiction over agriculture finance and
environment finance on the results of the
examination required under this paragraph.
The commissioner's report may include other
funding sources for septic system replacement
that are available to rural landowners.

(h) $150,000 the first year and $150,000 the
second year are for grants to the Center for
Rural Policy and Development. These are
onetime appropriations.

(i) $150,000 the first year is to provide grants
to Central Lakes College for the purposes of
designing, building, and offering credentials
in the area of meat cutting and butchery that
align with industry needs as advised by local
industry advisory councils. Notwithstanding
Minnesota Statutes, section 16A.28, any
unencumbered balance does not cancel at the
end of the first year and is available for the
second year. The commissioner may only
award a grant under this paragraph if the grant
is matched by a like amount from another
funding source. The commissioner must seek
matching dollars from Minnesota State
Colleges and Universities or other entities.
The appropriation is onetime and is available
until June 30, 2024. Any money remaining on
June 30, 2024, must be transferred to the
agricultural growth, research, and innovation
program under Minnesota Statutes, section
41A.12, and is available until June 30, 2025.
Grants may be used for costs including but
not limited to:

(1) facility renovation to accommodate meat
cutting;

(2) curriculum design and approval from the
Higher Learning Commission;

(3) program operational start-up costs;

(4) equipment required for a meat cutting
program; and

(5) meat handling start-up costs in regard to
meat access and market channel building.

No later than January 15, 2023, Central Lakes
College must submit a report outlining the use
of grant money to the chairs and ranking
minority members of the legislative
committees and divisions with jurisdiction
over agriculture and higher education.

(j) $2,000 the first year is for grants to the
Minnesota State Poultry Association. This is
a onetime appropriation. Notwithstanding
Minnesota Statutes, section 16A.28, any
unencumbered balance does not cancel at the
end of the first year and is available for the
second year.

(k) $17,000 the first year and $17,000 the
second year are for grants to the Minnesota
State Horticultural Society. These are onetime
appropriations.

(l) $18,000 the first year and $18,000 the
second year are for grants to the Minnesota
Livestock Breeders Association. These are
onetime appropriations.

(m) The commissioner shall continue to
increase connections with ethnic minority and
immigrant farmers to farming opportunities
and farming programs throughout the state.

(n) $25,000 the first year and $25,000 the
second year are for grants to the Southern
Minnesota Initiative Foundation to promote
local foods through an annual event that raises
public awareness of local foods and connects
local food producers and processors with
potential buyers.

(o) $75,000 the first year and $75,000 the
second year are for grants to Greater Mankato
Growth, Inc., for assistance to
agriculture-related businesses to promote jobs,
innovation, and synergy development. These
are onetime appropriations.

(p) $75,000 the first year and $75,000 the
second year are for grants to the Minnesota
Turf Seed Council for basic and applied
research. The Minnesota Turf Seed Council
may subcontract with a qualified third party
for some or all of the basic or applied research.
No later than January 15, 2023, the Minnesota
Turf Seed Council must submit a report
outlining the use of the grant money and
related accomplishments to the chairs and
ranking minority members of the legislative
committees with jurisdiction over agriculture.
These are onetime appropriations. Any
unencumbered balance does not cancel at the
end of the first year and is available for the
second year.

(q) $150,000 the first year and $150,000 the
second year are to establish an emerging
farmer office and hire a full-time emerging
farmer outreach coordinator. The emerging
farmer outreach coordinator must engage and
support emerging farmers regarding resources
and opportunities available throughout the
Department of Agriculture and the state. For
purposes of this paragraph, "emerging farmer"
has the meaning provided in Minnesota
Statutes, section 17.055, subdivision 1. Of the
amount appropriated each year, $25,000 is for
translation services for farmers and cottage
food producers.

(r) $222,000 the first year and $286,000 the
second year are to maintain the current level
of service delivery.

new text begin (s) $2,000,000 the second year is to provide
culturally appropriate services to emerging
farmers and food-system-related businesses.
This is a onetime appropriation and is
available through June 30, 2024.
new text end

new text begin (t) $2,000,000 the second year is to support
the IT modernization efforts, including laying
the technology foundations needed for
improving customer interactions with the
department for licensing and payments. This
is a onetime appropriation and is available
through June 30, 2025.
new text end

new text begin (u) $1,500,000 the second year is for transfer
to the agricultural emergency account
established under Minnesota Statutes, section
17.041, for emergency preparedness and
response activities, including for the
University of Minnesota Veterinary Diagnostic
Laboratory. This is a onetime appropriation.
new text end

new text begin (v) $3,000,000 the second year is available to
create and implement a hunger relief program
with grants to Second Harvest Heartland, on
behalf of the Feeding America food banks that
serve Minnesota, and to The Food Group.
Grants must be allocated using the same
formula that is used in the distribution of
United States Department of Agriculture
commodities under the Emergency Food
Assistance Program. At least 50 percent of the
money must be used to purchase food from
Minnesota producers and processors and
priority must be given to purchases from
emerging farmers. Each food bank receiving
funding under this paragraph may use up to
ten percent for administrative expenses. The
base appropriation under this paragraph in
fiscal year 2024 and thereafter is $1,000,000.
new text end

new text begin (w) $2,000,000 the second year is for transfer
to the Board of Trustees of the Minnesota
State Colleges and Universities to support
livestock processing technical education at
Central Lakes College and Ridgewater
College. Money may be used for the purposes
included in paragraph (i) and for student
financial assistance and outreach to
prospective students and employers. This
appropriation is available until June 30, 2024.
The base appropriation under this paragraph
in fiscal year 2024 and thereafter is $250,000.
new text end

new text begin (x) $1,000,000 the second year is for a grant
to The Good Acre for the Local Emergency
Assistance Farmer Fund (LEAFF) program to
compensate emerging farmers for crops
donated to hunger relief organizations in
Minnesota. The base appropriation under this
paragraph in fiscal year 2024 and thereafter
is $250,000.
new text end

ARTICLE 2

BROADBAND APPROPRIATIONS

Section 1. new text begin BROADBAND; APPROPRIATION.
new text end

new text begin $170,000,000 in fiscal year 2023 is appropriated from the general fund to the
commissioner of employment and economic development for deposit in the border-to-border
broadband fund account under Minnesota Statutes, section 116J.396. The appropriation is
onetime and must be used for grants and the purposes specified under Minnesota Statutes,
section 116J.395. Up to three percent of this appropriation may be used for administrative
costs.
new text end

ARTICLE 3

BOARD OF WATER AND SOIL RESOURCES APPROPRIATION

Section 1.

new text begin [103F.49] SOIL HEALTH COST-SHARE PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the terms in this subdivision
have the meanings given.
new text end

new text begin (b) "Board" means the Board of Water and Soil Resources.
new text end

new text begin (c) "Local units of government" has the meaning given under section 103B.305,
subdivision 5.
new text end

new text begin (d) "Soil health" has the meaning given under section 103C.101, subdivision 10a.
new text end

new text begin Subd. 2. new text end

new text begin Establishment. new text end

new text begin The board must administer a cost-share program consistent
with section 103C.501 to establish soil health practices that mitigate climate change impacts,
improve water quality, and provide related public benefits.
new text end

new text begin Subd. 3. new text end

new text begin Financial assistance. new text end

new text begin (a) The board may provide financial assistance to local
units of government, private sector providers, and farmers for the costs of soil health and
related water-quality practices consistent with a plan approved according to chapter 103B,
103C, or 103D. The board must establish costs eligible for financial and technical assistance
under this section.
new text end

new text begin (b) The board may enter into agreements with local units of government receiving
financial assistance under this subdivision.
new text end

new text begin (c) Financial assistance under this subdivision must give priority to multiyear contracts
and to leveraging contributions from nonstate sources.
new text end

new text begin Subd. 4. new text end

new text begin Technical assistance; review. new text end

new text begin (a) The board may employ or contract with
experts to implement the soil health program under this section.
new text end

new text begin (b) When implementing the soil health program, the board must:
new text end

new text begin (1) assist local units of government in achieving the objectives of the program;
new text end

new text begin (2) review and assess practice standards; and
new text end

new text begin (3) evaluate the effectiveness of completed practices.
new text end

new text begin Subd. 5. new text end

new text begin Federal aid availability. new text end

new text begin The board must regularly complete an analysis of the
availability of federal funds and programs to supplement or complement state and local
efforts consistent with the purposes of this section.
new text end

new text begin Subd. 6. new text end

new text begin Soil health practices. new text end

new text begin The board must work with the University of Minnesota's
Office for Soil Health, the United States Department of Agriculture's Natural Resources
Conservation Service, and other state and federal agencies, academic institutions, local
governments, and practitioners to foster mutual understanding and provide recommendations
for standardized specifications for soil health and related conservation and climate protection
practices, projects, and goals. The board may convene working groups to develop
information, education, and recommendations.
new text end

new text begin Subd. 7. new text end

new text begin Carbon market applicability. new text end

new text begin The board and the commissioner of agriculture
may cooperate with the United States Department of Agriculture, other federal and state
agencies, and private sector organizations to align or incorporate soil health practices with
carbon trading, mitigation, or offset markets and related tracking or recognition efforts.
new text end

Sec. 2. new text begin BOARD OF WATER AND SOIL RESOURCES; APPROPRIATION.
new text end

new text begin $17,000,000 in fiscal year 2023 is appropriated from the general fund to the Board of
Water and Soil Resources to accelerate the adoption of soil health practices consistent with
Minnesota Statutes, sections 103C.101, subdivision 10a, and 103F.49. This appropriation
is available until expended. The base appropriation under this section in fiscal year 2024
and thereafter is $4,500,000.
new text end

ARTICLE 4

AGRICULTURE STATUTORY CHANGES

Section 1.

Minnesota Statutes 2020, section 17.041, subdivision 1, is amended to read:

Subdivision 1.

Establishment; appropriation.

An agricultural emergency account is
established in the agricultural fund. Money in the account, including interest, is appropriated
to the commissioner for emergency new text begin preparedness and new text end response activities for agricultural
emergencies affecting producers of livestock, poultry, crops, or other agricultural products.
Eligible uses include agency costs directly attributed to new text begin preparing for and new text end responding to
agricultural emergencies and purchasing necessary equipment and reimbursing costs incurred
by local units of government that are not eligible for reimbursement from other sources.

Sec. 2.

new text begin [17.1016] COOPERATIVE GRANTS.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section:
new text end

new text begin (1) "agricultural commodity" and "agricultural product processing facility" have the
meanings given in section 17.101, subdivision 5; and
new text end

new text begin (2) "agricultural service" means an action made under the direction of a farmer that
provides value to another entity. Agricultural service includes grazing to manage vegetation.
new text end

new text begin Subd. 2. new text end

new text begin Grant program. new text end

new text begin (a) The commissioner may establish and implement a grant
program to help farmers finance new cooperatives that organize for purposes of operating
an agricultural product processing facility or marketing an agricultural product or agricultural
service.
new text end

new text begin (b) To be eligible for this program, a grantee must:
new text end

new text begin (1) be a cooperative organized under chapter 308A;
new text end

new text begin (2) certify that all control and equity in the cooperative is from farmers, family farm
partnerships, family farm limited liability companies, or family farm corporations as defined
in section 500.24, subdivision 2, who are actively engaged in agricultural commodity
production;
new text end

new text begin (3) be operated primarily to process agricultural commodities or market agricultural
products or services produced in Minnesota; and
new text end

new text begin (4) receive agricultural commodities produced primarily by shareholders or members
of the cooperative.
new text end

new text begin (c) The commissioner may receive applications and make grants up to $50,000 to eligible
grantees for feasibility, marketing analysis, assistance with organizational development,
financing and managing new cooperatives, product development, development of business
and marketing plans, and predesign of facilities including site analysis, development of bid
specifications, preliminary blueprints and schematics, and completion of purchase agreements
and other necessary legal documents.
new text end

Sec. 3.

Minnesota Statutes 2020, section 17.117, subdivision 9, is amended to read:

Subd. 9.

Allocation rescission.

(a) Continued availability of allocations granted to a
local government unit is contingent upon the commissioner's approval of the local
government unit's annual report. The commissioner shall review this annual report to ensure
that the past and future uses of the funds are consistent with the comprehensive water
management plan, other local planning documents, the requirements of the funding source,
and compliance to program requirements. If the commissioner concludes the past or intended
uses of the money are not consistent with these requirements, the commissioner shall rescind
all or part of the allocation awarded to a local government unit.

(b) The commissioner may rescind funds allocated to the local government unit that are
not designated to committed projects or disbursed within one year from the date of the
allocation agreement.

(c) deleted text begin An additional year to use the undisbursed portion of an allocation may be granted
by the commissioner under extenuating circumstances deleted text end new text begin The commissioner may rescind
uncommitted allocations new text end .

Sec. 4.

Minnesota Statutes 2020, section 17.117, subdivision 9a, is amended to read:

Subd. 9a.

Authority and responsibilities of local government units.

(a) A local
government unit that enters into an allocation agreement with the commissioner:

(1) is responsible for the local administration and implementation of the program in
accordance with this section;

(2) may submit applications for allocations to the commissioner;

(3) shall identify, develop, determine eligibility, define and approve projects, designate
maximum loan amounts for projects, and certify completion of projects implemented under
this program. In areas where no local government unit has applied for funds under this
program, the commissioner may appoint a local government unit to review and certify
projects or the commissioner may assume the authority and responsibility of the local
government unit;

(4) shall certify as eligible only projects that are within its geographic jurisdiction or
within the geographic area identified in its local comprehensive water management plans
or other local planning documents;

(5) may require withholding by the local lender of all or a portion of the loan to the
borrower until satisfactory completion of all required components of a certified project;

deleted text begin (6) must identify which account is used to finance an approved project if the local
government unit has allocations from multiple accounts in the agricultural and environmental
revolving accounts;
deleted text end

deleted text begin (7) deleted text end new text begin (6) new text end shall report to the commissioner annually the past and intended uses of allocations
awarded; and

deleted text begin (8) deleted text end new text begin (7) new text end may request additional funds in excess of their allocation when funds are available
in the agricultural and environmental revolving accounts, as long as all other allocation
awards to the local government unit have been used or committed.

(b) If a local government unit withdraws from participation in this program, the local
government unit, or the commissioner in accordance with the priorities established under
subdivision 6a, may designate another local government unit that is eligible under subdivision
6 as the new local government unit responsible for local administration of this program.
This designated local government unit may accept responsibility and administration of
allocations awarded to the former responsible local government unit.

Sec. 5.

Minnesota Statutes 2020, section 17.117, subdivision 10, is amended to read:

Subd. 10.

Authority and responsibilities of local lenders.

(a) Local lenders may enter
into lender agreements with the commissioner.

(b) Local lenders may enter into loan agreements with borrowers to finance eligible
projects under this section.

deleted text begin (c) The local lender shall notify the local government unit of the loan amount issued to
the borrower after the closing of each loan.
deleted text end

deleted text begin (d) deleted text end new text begin (c) new text end Local lenders with local revolving loan accounts created before July 1, 2001,
may continue to retain and use those accounts in accordance with their lending agreements
for the full term of those agreements.

deleted text begin (e) deleted text end new text begin (d) new text end Local lenders, including local government units designating themselves as the
local lender, may enter into participation agreements with other lenders.

deleted text begin (f) deleted text end new text begin (e) new text end Local lenders may enter into contracts with other lenders for the limited purposes
of loan review, processing and servicing, or to enter into loan agreements with borrowers
to finance projects under this section. Other lenders entering into contracts with local lenders
under this section must meet the definition of local lender in subdivision 4, must comply
with all provisions of the lender agreement and this section, and must guarantee repayment
of the loan funds to the local lender.

deleted text begin (g) deleted text end new text begin (f) new text end When required by the local government unit, a local lender must withhold all or
a portion of the loan disbursement for a project until notified by the local government unit
that the project has been satisfactorily completed.

deleted text begin (h) deleted text end new text begin (g) new text end The local lender is responsible for repaying all funds provided by the commissioner
to the local lender.

deleted text begin (i) deleted text end new text begin (h) new text end The local lender is responsible for collecting repayments from borrowers. If a
borrower defaults on a loan issued by the local lender, it is the responsibility of the local
lender to obtain repayment from the borrower. Default on the part of borrowers shall have
no effect on the local lender's responsibility to repay its obligations to the commissioner
whether or not the local lender fully recovers defaulted amounts from borrowers.

deleted text begin (j) deleted text end new text begin (i) new text end The local lender shall provide sufficient collateral or protection to the commissioner
for the funds provided to the local lender. The commissioner must approve the collateral
or protection provided.

Sec. 6.

Minnesota Statutes 2020, section 17.117, subdivision 11, is amended to read:

Subd. 11.

Loans issued to borrower.

(a) Local lenders may issue loans only for projects
that are approved and certified by the local government unit as meeting priority needs
identified in a comprehensive water management plan or other local planning documents,
are in compliance with accepted practices, standards, specifications, or criteria, and are
eligible for financing under Environmental Protection Agency or other applicable guidelines.

(b) The local lender may use any additional criteria considered necessary to determine
the eligibility of borrowers for loans.

(c) Local lenders shall set the terms and conditions of loans to borrowers, except that deleted text begin :
deleted text end

deleted text begin (1) no loan to a borrower may exceed $200,000; and
deleted text end

deleted text begin (2) deleted text end no borrower shall, at any time, have multiple loans from this program with a total
outstanding loan balance of more than $200,000.

(d) The maximum term length for projects in this paragraph is ten years.

(e) Fees charged at the time of closing must:

(1) be in compliance with normal and customary practices of the local lender;

(2) be in accordance with published fee schedules issued by the local lender;

(3) not be based on participation program; and

(4) be consistent with fees charged other similar types of loans offered by the local
lender.

(f) The interest rate assessed to an outstanding loan balance by the local lender must not
exceed three percent per year.

Sec. 7.

Minnesota Statutes 2020, section 17.117, subdivision 11a, is amended to read:

Subd. 11a.

Eligible projects.

(a) All projects that remediate or mitigate adverse
environmental impacts are eligible if the project is eligible under an allocation agreement.

(b) A manure management project is eligible if the project remediates or mitigates
impacts from facilities with less than 1,000 animal units as defined in Minnesota Rules,
chapter 7020, and otherwise meets the requirements of this section.

(c) A drinking water project is eligible if the project:

(1) remediates deleted text begin the deleted text end new text begin or mitigates the inadequate flow, new text end adverse environmental impacts or
presence of contaminants in deleted text begin private well deleted text end new text begin privately owned new text end water new text begin supplies that are used for
drinking water by people or livestock, privately owned water service lines, or privately
owned plumbing and fixtures new text end ;

(2) implements best management practices new text begin that are intended new text end to achieve drinking water
standards new text begin or adequate flow new text end ; and

(3) otherwise meets the requirements of this section.

Sec. 8.

Minnesota Statutes 2020, section 17.118, subdivision 1, is amended to read:

Subdivision 1.

Establishment.

The commissioner may award a livestock investment
grant to a person who raises livestock in this state equal to ten percent of the first deleted text begin $500,000 deleted text end new text begin
$250,000 new text end of qualifying expenditures, provided the person makes qualifying expenditures
of at least $4,000. The commissioner may award multiple livestock investment grants to a
person over the life of the program deleted text begin as long as the cumulative amount does not exceed
$50,000 deleted text end .

Sec. 9.

Minnesota Statutes 2020, section 17.118, subdivision 3, is amended to read:

Subd. 3.

Eligibility.

deleted text begin (a) deleted text end To be eligible for a livestock investment grant, a person must:

(1) be a resident of Minnesota or an entity specifically defined in section 500.24,
subdivision 2, that is eligible to own farmland and operate a farm in this state under section
500.24;

(2) be the principal operator of the farm;

(3) hold a feedlot registration, if required; and

(4) apply to the commissioner on forms prescribed by the commissioner including a
statement of the qualifying expenditures made during the qualifying period along with any
proof or other documentation the commissioner may require.

deleted text begin (b) The $50,000 maximum grant applies at the entity level for partnerships, S
corporations, C corporations, trusts, and estates as well as at the individual level. In the case
of married individuals, the grant is limited to $50,000 for a married couple.
deleted text end

Sec. 10.

Minnesota Statutes 2020, section 17.118, subdivision 4, is amended to read:

Subd. 4.

Process.

The commissioner, in consultation with the chairs and ranking minority
members of the house of representatives and senate committees with jurisdiction over
agriculture finance, shall develop competitive eligibility criteria and may allocate grants on
a needs basis. deleted text begin The commissioner shall place any eligible unfunded applications on a waiting
list and, notwithstanding subdivision 2, paragraph (d), give them consideration during the
next fiscal year in which program funding is available. deleted text end The commissioner shall notify in
writing any applicant who applies for a grant and is ineligible under the provisions of this
section as well as any applicant whose application is received or reviewed after the fiscal
year funding limit has been reached.

Sec. 11.

new text begin [17.994] SOIL HEALTH FINANCIAL ASSISTANCE PROGRAM.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin The soil health financial assistance program is established
to promote soil health practices that mitigate climate change impacts, improve water quality,
and provide related public benefits.
new text end

new text begin Subd. 2. new text end

new text begin Financial assistance. new text end

new text begin (a) The commissioner may provide financial assistance
to local governments, private sector providers, or farmers to cover the costs of specialized
equipment and technology necessary to implement and sustain soil health practices, including
conservation tillage and seeding equipment, purchases or subscriptions of equipment
technology, services to landowners, and other equipment purchases or financial assistance
that the commissioner considers appropriate to promote healthy soil.
new text end

new text begin (b) The commissioner must establish costs eligible for financial assistance under this
section.
new text end

new text begin (c) The commissioner must prioritize or weigh program implementation elements based
on considerations including:
new text end

new text begin (1) support for soil health principles;
new text end

new text begin (2) supporting participants or participation in the Minnesota agricultural water quality
certification program established under Minnesota Statutes, sections 17.9891 to 17.993;
new text end

new text begin (3) reducing or avoiding greenhouse gas emissions; and
new text end

new text begin (4) other beneficial public or private programs or initiatives to achieve program results.
new text end

Sec. 12.

Minnesota Statutes 2021 Supplement, section 41A.21, subdivision 2, is amended
to read:

Subd. 2.

Eligibility.

(a) A facility eligible for payment under this section must source
at least 80 percent of its forest resources raw materials from Minnesota. The facility must
be located in Minnesota; must begin construction activities by December 31, 2022, for a
specific location; must deleted text begin begin production deleted text end new text begin have produced at least one OSB square foot on a
3/8-inch nominal basis new text end at a specific location by June 30, 2025; and must not begin operating
before January 1, 2022. Eligible facilities must be new OSB construction sites with total
capital investment in excess of $250,000,000. Eligible OSB production facilities must
produce at least deleted text begin 200,000,000 deleted text end new text begin 50,000,000 new text end OSB square feet on a 3/8-inch nominal basis of
OSB each deleted text begin year deleted text end new text begin quarter new text end . At least one product produced at the facility should be a wood-based
wall or roof structural sheathing panel that has an integrated, cellulose-based paper overlay
that serves as a water resistive barrier.

(b) No payments shall be made for OSB production that occurs after June 30, 2036, for
those eligible producers under paragraph (a).

(c) An eligible producer of OSB shall not transfer the producer's eligibility for payments
under this section to a facility at a different location.

(d) A producer that ceases production for any reason is ineligible to receive payments
under this section until the producer resumes production.

Sec. 13.

Minnesota Statutes 2021 Supplement, section 41A.21, subdivision 6, is amended
to read:

Subd. 6.

Appropriation.

(a) In fiscal year 2025, a sum sufficient to make the payments
required by this section, not to exceed $1,500,000, is appropriated from the general fund to
the commissioner. This is a onetime appropriation.

(b) From fiscal year 2026 through fiscal year 2034, a sum sufficient to make the payments
required by this section, not to exceed $3,000,000 in a fiscal year, is annually appropriated
from the general fund to the commissioner.

new text begin (c) The commissioner may use up to 6.5 percent of this appropriation for costs incurred
to administer the program.
new text end

Sec. 14.

Minnesota Statutes 2020, section 41B.047, subdivision 3, is amended to read:

Subd. 3.

Eligibility.

To be eligible for this program, a borrower must:

(1) meet the requirements of section 41B.03, subdivision 1;

(2) certify that the damage or loss was (i) sustained within a county that was the subject
of a state or federal disaster declaration; (ii) due to the confirmed presence of a highly
contagious animal disease in Minnesota; (iii) due to an infectious human disease for which
the governor has declared a peacetime emergency; or (iv) due to an emergency as determined
by the authority;

(3) demonstrate an ability to repay the loan; and

(4) have received at least deleted text begin 50 deleted text end new text begin 20 new text end percent of average annual gross income from farming
for the past deleted text begin three years deleted text end new text begin year new text end .

Sec. 15.

Minnesota Statutes 2020, section 223.17, subdivision 7, is amended to read:

Subd. 7.

deleted text begin Action on a bond deleted text end new text begin Breach of contract new text end .

A producer claiming to be damaged
by a breach of a contract for the purchase of grain by a licensed grain buyer may file a
written claim with the commissioner. The claim must state the facts constituting the claim.
deleted text begin The claim must be filed with the commissioner within 180 days of the breach of the contract. deleted text end
If a claim is valid, the commissioner may immediately suspend the license, in which case
the licensee shall surrender the license to the commissioner. Within 15 days the licensee
may request an administrative hearing subject to chapter 14 to determine whether the license
should be revoked. If no request is made within 15 days, the commissioner shall revoke the
license.

Sec. 16.

Minnesota Statutes 2020, section 223.17, subdivision 7a, is amended to read:

Subd. 7a.

Bond requirements; claims.

For entities licensed under this chapter and
chapter 232, the bond requirements and claims against the bond are governed under section
deleted text begin 232.22, subdivision 6a deleted text end new text begin 223.24, subdivision 13 new text end .

Sec. 17.

Minnesota Statutes 2020, section 223.175, is amended to read:

223.175 WRITTEN VOLUNTARY EXTENSION OF CREDIT CONTRACTS;
FORM.

A written confirmation required under section 223.177, subdivision 2, and a written
voluntary extension of credit contract must include those items prescribed by the
commissioner by rule. A contract shall include a statement of the legal and financial
responsibilities of grain buyers and sellers established in this chapter. A contract shall also
include the following statement in not less than ten point, all capital type, framed in a box
with space provided for the seller's signature: "THIS CONTRACT CONSTITUTES A
VOLUNTARY EXTENSION OF CREDIT. THIS CONTRACT deleted text begin IS NOT COVERED BY
ANY GRAIN BUYER'S BOND deleted text end new text begin MAY NOT BE COVERED COMPLETELY BY THE
GRAIN INDEMNITY ACCOUNT new text end ." If a written contract is provided at the time the grain
is delivered to the grain buyer, the seller shall sign the contract in the space provided beneath
the statement. A transaction that does not meet the provisions of a voluntary extension of
credit, including the issuance and signing of a voluntary extension of credit contract, is a
cash sale.

Sec. 18.

Minnesota Statutes 2020, section 223.19, is amended to read:

223.19 RULES.

The commissioner may make rules pursuant to chapter 14 to carry out the provisions of
sections 223.15 to deleted text begin 223.23 deleted text end new text begin 223.24 new text end .

Sec. 19.

new text begin [223.24] GRAIN INDEMNITY ACCOUNT.
new text end

new text begin Subdivision 1. new text end

new text begin Establishment. new text end

new text begin (a) The grain indemnity account is established under the
direction and control of the commissioner of agriculture. The account shall consist of grain
indemnity account premiums, money from any other source, and interest.
new text end

new text begin Subd. 2. new text end

new text begin Account; appropriation. new text end

new text begin (a) A grain indemnity account is established in the
agricultural fund. Money in the account, including interest, is appropriated to the
commissioner to pay valid claims and to administer this section.
new text end

new text begin (b) The commissioner shall direct payments from the account only for the following
purposes:
new text end

new text begin (1) the payment of valid claims;
new text end

new text begin (2) the payment of grain indemnity premium refunds;
new text end

new text begin (3) the payment of administrative expenses under paragraph (c);
new text end

new text begin (4) the payment of legal fees and legal expenses under subdivision 6; and
new text end

new text begin (5) the payment of a trustee appointed under subdivision 5.
new text end

new text begin (c) The commissioner shall allocate money from the account to a separate administrative
expenses account to pay administrative expenses and to reimburse the agency for producer
indemnity account expenses. Administrative expenses under this paragraph include the
actual cost of processing refunds of administrative premiums and producer premiums,
enforcement, record keeping, ordinary management and investment fees connected with
the operation of the account, and legal expenses.
new text end

new text begin Subd. 3. new text end

new text begin Eligibility. new text end

new text begin A producer is eligible to receive an indemnity payment from the
commissioner if the producer sold grain to a licensed grain buyer as defined in chapter 223
or stored grain with a licensed public grain warehouse operator under chapter 232 and the
producer is damaged by the licensee's failure to pay for or redeliver grain.
new text end

new text begin Subd. 4. new text end

new text begin Application. new text end

new text begin (a) A producer asserting eligibility under subdivision 3 must file
a completed claim with the commissioner. The producer must state the facts constituting
the claim and all other information required by the commissioner.
new text end

new text begin (b) Upon receiving a claim, the commissioner must promptly determine the validity of
the claim and notify the claimant of the commissioner's determination.
new text end

new text begin (c) An aggrieved party may appeal the commissioner's determination by requesting,
within 15 days, that the commissioner initiate a contested case proceeding under chapter
14.
new text end

new text begin Subd. 5. new text end

new text begin Payment limitation. new text end

new text begin (a) For each failure, the commissioner must pay the eligible
producer:
new text end

new text begin (1) the amount equal to the value of the grain sold on cash sale, grain assigned to
warehouse receipt, and open storage less than 180 days from deposit;
new text end

new text begin (2) the lesser of $750,000 or 75 percent of the amount owed to the seller for voluntary
extension of credit contracts originating within 180 days of the breach of contract;
new text end

new text begin (3) the lesser of $500,000 or 50 percent for open storage and the voluntary extension of
credit contracts originating between 181 days and 18 months from the breach of contract;
or
new text end

new text begin (4) the lesser of $250,000 or 25 percent for open storage and the voluntary extension of
credit contracts originating between 19 months and 36 months from the breach of contract.
new text end

new text begin (b) Claims filed more than 36 months from the breach of contract are not eligible for
payment.
new text end

new text begin (c) In the event that a licensee holds both a Minnesota grain buyer license, as defined
in chapter 223, and a license with the United States Department of Agriculture (USDA)
under the United States Warehouse Act, the seller may only file a claim with the grain
indemnity account if the seller sold grain as a cash sale or under a voluntary extension of
credit contract. The commissioner must deny any claims for stored grain from a seller that
holds both a Minnesota grain buyer license and a license with the USDA under the United
States Warehouse Act.
new text end

new text begin (d) If valid claims exceed the amount of money available in the grain indemnity account,
the commissioner must pay claims to producers in the order that the claims were received.
When additional money becomes available, the commissioner must resume issuing indemnity
payments to each eligible producer until each producer receives the maximum amount
payable under paragraph (a).
new text end

new text begin Subd. 6. new text end

new text begin Court order. new text end

new text begin (a) The commissioner may apply to the district court for an order
appointing a trustee or receiver to manage and supervise the operations of a grain buyer or
public grain warehouse operator in default. The commissioner may participate in any
resulting court proceeding as an interested party.
new text end

new text begin (b) The commissioner may recover the cost of the appointed trustee using money
appropriated under subdivision 2.
new text end

new text begin Subd. 7. new text end

new text begin Debt obligation; subrogated claim. new text end

new text begin (a) Money paid by the commissioner to
satisfy a valid claim constitutes a debt obligation of the grain buyer or public grain warehouse
operator in default. The commissioner may take action against the grain buyer or public
grain warehouse operator to recover the amount of any claim payment plus reasonable costs,
attorney fees, and interest computed at the rate provided in section 270C.40. The
commissioner must deposit any amount recovered under this subdivision in the grain
indemnity account.
new text end

new text begin (b) As a condition of payment from the commissioner, a producer must subrogate the
producer's interest in a voluntary extension of credit contract to the commissioner in an
amount equal to any claim payment or payments that the producer received under this
section.
new text end

new text begin (c) The commissioner may recover any debt to the account from a member of the board
or management who acted negligently or fraudulently.
new text end

new text begin Subd. 8. new text end

new text begin Grain indemnity premiums. new text end

new text begin (a) Except as provided in subdivision 10,
beginning on July 1, 2022, sellers of grain must be charged a grain indemnity premium as
determined and published by the commissioner not to exceed 0.2 percent of the price on all
marketed grain that is sold to a grain buyer as defined in chapter 223.
new text end

new text begin (b) The grain indemnity premiums required under this section are in addition to any
other fees or assessments required by law.
new text end

new text begin Subd. 9. new text end

new text begin Collection and submission of grain indemnity premiums. new text end

new text begin (a) When
purchasing grain, a grain buyer, grain buyer's agent, or grain buyer's representative must:
new text end

new text begin (1) deduct the grain indemnity premium described in subdivision 8 from the payment;
and
new text end

new text begin (2) document the grain indemnity premium paid by the seller.
new text end

new text begin (b) A grain buyer must submit grain indemnity premiums collected under paragraph (a)
to the commissioner for the purpose of financing or contributing to the financing of the
account by:
new text end

new text begin (1) January 31 for grain indemnity premiums collected during the months of July, August,
September, October, November, and December; and
new text end

new text begin (2) July 31 for grain indemnity premiums collected during the months of January,
February, March, April, May, and June.
new text end

new text begin (c) The records of each grain buyer must clearly indicate the grain indemnity premiums
collected by the grain buyer. The portion of the records reflecting the premiums collected
must be open for inspection by the commissioner during regular business hours.
new text end

new text begin (d) All financial statements filed with the commissioner are private or nonpublic data
as provided in section 13.02.
new text end

new text begin Subd. 10. new text end

new text begin Amount of account; basis for suspension and reinstatement of grain
indemnity premium collection. new text end

new text begin (a) The producer premiums required under subdivision 8
must be collected until the account contains more than $15,000,000, as of June 30 of any
given year.
new text end

new text begin (b) Except as provided in paragraph (c), after the account reaches $15,000,000, the
commissioner may not require the collection of additional grain indemnity premiums until
the amount in the fund drops below $9,000,000, as determined under subdivision 8. In a
year when the commissioner determines that the account is at or below $9,000,000, the
commissioner may reinstate the collection described in this section.
new text end

new text begin (c) The commissioner shall announce the intention to collect the premiums described
in this section by May 1 with collection to begin July 1 until the account contains at least
$15,000,000. The commissioner must notify the public of the commissioner's intent to
reinstate collection of additional grain indemnity premiums through publication in the State
Register and notifying each producer of the producer's obligation to collect premiums.
new text end

new text begin Subd. 11. new text end

new text begin Grain indemnity refund; opt out. new text end

new text begin (a) Subject to subdivision 9, a producer
that has paid a grain indemnity premium, either directly or collected by a licensee, may
receive a refund of that premium from the account by submitting a written demand for a
refund to the commissioner, delivered personally or by first-class mail within 12 months
after the producer paid the premium.
new text end

new text begin (b) A producer must submit a demand for a refund of a grain indemnity premium under
paragraph (a) on a demand for refund form developed by the commissioner. The
commissioner must make the form available to a licensee, producer, or member of the public
upon request.
new text end

new text begin (c) If a producer is entitled to a refund of a grain indemnity premium under this section,
the commissioner must pay the refund within 90 days of receiving the demand for a refund.
new text end

new text begin (d) If the commissioner announces grain indemnity premiums as required under
subdivision 10 by June 30, the commissioner must send a notice to each producer who
requested a refund of a grain indemnity premium during the previous three fiscal years. The
notice must inform the producer of the deadline for and method of submitting a demand for
a refund to the commissioner under paragraphs (a) and (b) and the method for reentering
the program under paragraph (e).
new text end

new text begin (e) A producer that receives a refund of a grain indemnity premium under paragraph (a)
is not entitled to participate in the program or to receive any payment under this section
unless the producer reenters the grain indemnity account by meeting all of the following
conditions:
new text end

new text begin (1) the producer must submit a request for reentry into the grain indemnity account to
the commissioner. The producer must submit the request on the form required by the
commissioner and must deliver the request to the commissioner;
new text end

new text begin (2) the commissioner must review the producer's request for reentry and approve or deny
the request; and
new text end

new text begin (3) the producer must pay into the account all grain indemnity fund premiums that were
refunded to the producer and interest on the refunds as determined by the commissioner.
new text end

new text begin (f) A producer that reenters the grain indemnity program under paragraph (e) is eligible
to be reimbursed for claims under the program for any breach of contract that occurs at least
90 days after reentry.
new text end

new text begin (g) A producer is not eligible for a refund of a grain indemnity premium under this
section if the producer has received reimbursement from the account for a valid claim within
the preceding 36 months.
new text end

new text begin Subd. 12. new text end

new text begin Penalties; enforcement action; costs and expenses. new text end

new text begin (a) In addition to any
other penalty or remedy provided by law, a person who knowingly or intentionally commits
any of the following is guilty of a misdemeanor punishable by a fine as determined by the
commissioner:
new text end

new text begin (1) refusing or failing to collect any grain indemnity premiums as required under this
section;
new text end

new text begin (2) refusing or failing to pay to the commissioner any grain indemnity premiums collected
under this section;
new text end

new text begin (3) making a false statement, representation, or certification, or knowingly failing to
make a required statement, representation, or certification in a record, report, or other
document that the person files with the department; and
new text end

new text begin (4) resisting, preventing, impeding, or interfering with the commissioner in the
performance of the commissioner's duties defined in this section.
new text end

new text begin (b) In addition to the criminal penalty described in paragraph (a), the commissioner in
an enforcement action for a violation described in paragraph (a), clause (1) or (2), must
order the grain buyer to pay into the account any grain indemnity premiums collected by
the grain dealer that the grain buyer owes to the account and may order the grain buyer to
pay interest on the amount that the grain buyer owes to the account.
new text end

new text begin Subd. 13. new text end

new text begin Additional bonds; new license holders. new text end

new text begin (a) Except as provided in clause (2),
before a grain buyer's license is issued, a person who has not been licensed to buy grain in
the previous licensing period must file with the commissioner a bond in a penal sum of
$100,000.
new text end

new text begin (1) This bond must remain in effect for the first three years of the grain buyer's license.
new text end

new text begin (2) A grain buyer who purchases grain immediately upon delivery solely with cash; a
certified check; a cashier's check; or a postal, bank, or express money order is exempt from
this subdivision if the grain buyer's gross annual purchases are $100,000 or less.
new text end

new text begin (b) The commissioner may require a supplemental bond in an amount prescribed by the
commissioner based on the financial statements required in section 223.17, subdivision 6.
new text end

new text begin (c) The grain bond must be conditioned on a form provided by the commissioner.
new text end

new text begin (d) The bond required under paragraphs (a) and (b) must provide for the payment of any
loss caused by the grain buyer's failure to pay upon the owner's demand, including loss
caused by the grain buyer's failure to pay within the time required. The bond must be
conditioned upon the grain buyer being duly licensed.
new text end

new text begin (e) The bond must not be cumulative from one licensing period to the next. The maximum
liability of the bond must be the bond's face value for the licensing period.
new text end

new text begin (f) The bond must be continuous until canceled. To cancel a bond, a surety must provide
90 days' written notice of the bond's termination date to the licensee and the commissioner.
new text end

new text begin (g) Upon the commissioner's determination that a claim is valid, the surety for any claims
against the bond must make payments to the grain indemnity account.
new text end

new text begin EFFECTIVE DATE. new text end

new text begin This section is effective the day following final enactment.
new text end

Sec. 20.

Minnesota Statutes 2020, section 232.22, subdivision 5, is amended to read:

Subd. 5.

Statement of grain in storage; reports.

deleted text begin (a) All public grain warehouse operators
must by February 15 of each year file with the commissioner on a form approved by the
commissioner a report showing the annual average liability of all grain outstanding on grain
warehouse receipts, open storage, and grain stored for feed processing that occurred during
the preceding calendar year. This report shall be used for the purpose of establishing the
penal sum of the bond.
deleted text end

deleted text begin (b) Warehouse operators that are at a maximum bond and want to continue at maximum
bond do not need to file this report.
deleted text end

deleted text begin (c) It is a violation of this chapter for any public grain warehouse operator to fail to file
the report required in paragraph (a).
deleted text end

deleted text begin (d) deleted text end new text begin (a) new text end Every public grain warehouse operator shall keep in a place of safety complete
and accurate records and accounts relating to any grain warehouse operated. The records
shall reflect each commodity received and shipped daily, the balance remaining in the grain
warehouse at the close of each business day, a listing of all unissued grain warehouse receipts
in the operator's possession, a record of all grain warehouse receipts issued which remain
outstanding and a record of all grain warehouse receipts which have been returned for
cancellation. Copies of grain warehouse receipts or other documents evidencing ownership
of grain by a depositor, or other liability of the grain warehouse operator, shall be retained
as long as the liability exists but must be kept for a minimum of three years.

deleted text begin (e) deleted text end new text begin (b) new text end Every public grain warehouse operator must maintain in the grain warehouse at
all times grain of proper grade and sufficient quantity to meet delivery obligations on all
outstanding grain warehouse receipts.

Sec. 21. new text begin REPEALER.
new text end

new text begin Minnesota Statutes 2020, sections 223.17, subdivisions 4 and 8; and 232.22, subdivisions
4, 6, 6a, and 7, new text end new text begin are repealed.
new text end

APPENDIX

Repealed Minnesota Statutes: 22-05813

223.17 LICENSES; BONDING; CLAIMS; DISBURSEMENTS.

Subd. 4.

Bond.

(a) Except as provided in paragraphs (c) to (e), before a grain buyer's license is issued, the applicant for the license must file with the commissioner a bond in a penal sum prescribed by the commissioner but not less than the following amounts:

(1) $10,000 for grain buyers whose gross annual purchases are $100,000 or less;

(2) $20,000 for grain buyers whose gross annual purchases are more than $100,000 but not more than $750,000;

(3) $30,000 for grain buyers whose gross annual purchases are more than $750,000 but not more than $1,500,000;

(4) $40,000 for grain buyers whose gross annual purchases are more than $1,500,000 but not more than $3,000,000;

(5) $50,000 for grain buyers whose gross annual purchases are more than $3,000,000 but not more than $6,000,000;

(6) $70,000 for grain buyers whose gross annual purchases are more than $6,000,000 but not more than $12,000,000;

(7) $125,000 for grain buyers whose gross annual purchases are more than $12,000,000 but not more than $24,000,000; and

(8) $150,000 for grain buyers whose gross annual purchases exceed $24,000,000.

(b) The amount of the bond shall be based on the most recent gross annual grain purchase report of the grain buyer.

(c) A first-time applicant for a grain buyer's license shall file a $50,000 bond with the commissioner. This bond shall remain in effect for the first year of the license. Thereafter, the licensee shall comply with the applicable bonding requirements contained in paragraph (a), clauses (1) to (8).

(d) In lieu of the bond required by this subdivision the applicant may deposit with the commissioner of management and budget an irrevocable bank letter of credit as defined in section 336.5-102, in the same amount as would be required for a bond.

(e) A grain buyer who purchases grain immediately upon delivery solely with cash; a certified check; a cashier's check; or a postal, bank, or express money order is exempt from this subdivision if the grain buyer's gross annual purchases are $100,000 or less.

(f) Bonds must be continuous until canceled. To cancel a bond, a surety must provide 90 days' written notice of the bond's termination date to the licensee and the commissioner.

Subd. 8.

Bond disbursement.

(a) The bond required under subdivision 4 shall provide for payment of loss caused by the grain buyer's failure to pay, upon the owner's demand, the purchase price of grain sold to the grain buyer in the manner provided by subdivision 5, including loss caused by failure to pay within the time required. The bond shall be conditioned upon the grain buyer being duly licensed as provided herein.

(b) The commissioner shall promptly determine the validity of all claims filed and notify the claimants of the determination. An aggrieved party may appeal the commissioner's determination by requesting, within 15 days, that the commissioner initiate a contested case proceeding. In the absence of such a request, or following the issuance of a final order in a contested case, the surety company shall issue payment promptly to those claimants entitled to payment. The commissioner may apply to the district court for an order appointing a trustee or receiver to manage and supervise the operations of the grain buyer in default. The commissioner may participate in any resulting court proceeding as an interested party.

(c) If a grain buyer has become liable to more than one producer by reason of breaches of the conditions of the bond and the amount of the bond is insufficient to pay the entire liability to all producers entitled to the protection of the bond, the proceeds of the bond shall be apportioned among the bona fide claimants.

(d) The bond shall not be cumulative from one licensing period to the next. The maximum liability of the bond shall be its face value for the licensing period.

(e) The bond disbursement shall occur 200 days from the date the commissioner publishes a public notice of a claim. At the end of this time period, the commissioner shall initiate bond payments on all valid claims received by the commissioner.

232.22 LICENSES, BONDING CLAIMS, DISBURSEMENTS.

Subd. 4.

Bonding.

(a) Before a license is issued, except as provided under paragraph (c), the applicant for a public grain warehouse operator's license shall file with the commissioner a bond in a penal sum prescribed by the commissioner based on the annual average storage liability as stated on the statement of grain in storage report or on the gross annual grain purchase report, whichever is greater, and applying the following amounts:

(1) $10,000 for storages with annual average storage liability of more than $0 but not more than $25,000;

(2) $20,000 for storages with annual average storage liability of more than $25,001 but not more than $50,000;

(3) $30,000 for storages with annual average storage liability of more than $50,001 but not more than $75,000;

(4) $50,000 for storages with annual average storage liability of more than $75,001 but not more than $100,000;

(5) $75,000 for storages with annual average storage liability of more than $100,001 but not more than $200,000;

(6) $125,000 for storages with annual average storage liability of more than $200,001 but not more than $300,000;

(7) $175,000 for storages with annual average storage liability of more than $300,001 but not more than $400,000;

(8) $225,000 for storages with annual average storage liability of more than $400,001 but not more than $500,000;

(9) $275,000 for storages with annual average storage liability of more than $500,001 but not more than $600,000;

(10) $325,000 for storages with annual average storage liability of more than $600,001 but not more than $700,000;

(11) $375,000 for storages with annual average storage liability of more than $700,001 but not more than $800,000;

(12) $425,000 for storages with annual average storage liability of more than $800,001 but not more than $900,000;

(13) $475,000 for storages with annual average storage liability of more than $900,001 but not more than $1,000,000; and

(14) $500,000 for storages with annual average storage liability of more than $1,000,000.

(b) Bonds must be continuous until canceled. To cancel a bond, a surety must provide 90 days' written notice of the bond's termination date to the licensee and the commissioner.

(c) In lieu of the bond required by this subdivision, the applicant may deposit with the commissioner of management and budget an irrevocable bank letter of credit as defined in section 336.5-102, in the same amount as would be required for a bond.

Subd. 6.

Bond claims.

A person claiming to be damaged by a breach of the conditions of a bond of a licensed public grain warehouse operator may file a written claim with the commissioner stating the facts constituting the claim. The claim must be filed with the commissioner within 180 days of the breach of the conditions of the bond. If the commissioner has reason to believe that a claim is valid, the commissioner may immediately suspend the license of the public grain warehouse operator and the licensee must surrender the license to the commissioner. Within 15 days the licensee may request an administrative hearing subject to chapter 14 to determine whether the license should be revoked. If no request is made within 15 days the commissioner shall revoke the license.

Subd. 6a.

Bond determinations.

If a public grain warehouse operator is licensed under both this chapter and chapter 223, the warehouse shall have its bond determined by its gross annual grain purchase amount or its annual average grain storage value, whichever is greater. For those entities licensed under this chapter and chapter 223, the entire bond shall be available to any claims against the bond for claims filed under this chapter and chapter 223.

Subd. 7.

Bond disbursement.

(a) The bond of a public grain warehouse operator must be conditioned that the public grain warehouse operator issuing a grain warehouse receipt is liable to the depositor for the delivery of the kind, grade and net quantity of grain called for by the receipt.

(b) Upon notification of default, the commissioner shall determine the validity of all claims and notify all parties having filed claims. Any aggrieved party may appeal the commissioner's determination by requesting, within 15 days, that the commissioner initiate a contested case proceeding. In the absence of such a request, or following the issuance of a final order in a contested case, the surety company shall issue payment to those claimants entitled to payment. If the commissioner determines it is necessary, the commissioner may apply to the district court for an order appointing a trustee or receiver to manage and supervise the operations of the grain warehouse operator in default. The commissioner may participate in any resulting court proceeding as an interested party.

(c) For the purpose of determining the amount of bond disbursement against all valid claims under a condition one bond, all grain owned or stored in the public grain warehouse shall be sold and the combined proceeds deposited in a special fund. Payment shall be made from the special fund satisfying the valid claims of grain warehouse receipt holders.

(d) If a public grain warehouse operator has become liable to more than one depositor or producer by reason of breaches of the conditions of the bond and the amount of the bond is insufficient to pay, beyond the proceeds of the special fund, the entire liability to all valid claimants, the proceeds of the bond and special fund shall be apportioned among the valid claimants on a pro rata basis.

(e) A bond is not cumulative from one licensing period to the next. The maximum liability of the bond shall be its face value for the licensing period.

(f) The bond disbursement shall occur 200 days from the date the commissioner publishes a public notice of a claim. At the end of this time period, the commissioner shall initiate bond payments on all valid claims received by the department.